Non-Performing Assets of Commercial Banks: Thorns in the Flesh

Abstract

The article delves into the fact that dependence on bank loan for the entirety of operations of companies is fraught with many problems. Non-Performing Assets of banks have been figuring as thorns in the flesh of not only banks, but also the Government and the Reserve Bank of India. For borrowing enterprises, interest continues to accumulate and in unfavourable externalities banks do not show any understanding of the difficulties faced by the entrepreneurs even when they are serious about payment of bank dues in time. The call by loaner banks and some other circles for the creation of Asset Reconstruction Companies for taking over all the bad loans does not appear to be a consistent solution of the problem .